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Saturday, August 18, 2012

The Mystery Behind the Rise and Fall of Vision Plasma Systems Inc (VLNX)

VISION PLASMA SYSTEMS INC (PINK:VLNX)’s stock tanked
on Friday after a spectacular rally on Thursday that saw record volumes of
shares being traded.

Was it a penny stock scam? Or were investors genuinely
caught on the wrong foot? Investors are certainly mystified by it, especially
those who got sucked in by the recommendations of certain `experts'.

On Thursday after the close of trade Vision Plasma
announced that it had signed an agreement with Japan's Cell Runner Inc. for the
sale of two Arc Master I Units.

These initial units would be used to remediate over
5,000 hazmat suits used daily by clean-up crews working in the Fukushima
Nuclear Facility, at a cost of $5.8 million per unit.

However even before this news was released shares of
Vision Plasma soared a whopping 270 percent, tripling in a single day with 308
million shares being traded.

Both Penny Pic and Awesome Penny Stocks had actively
recommended the company's shares, luring free subscribers to pay $150 a month
so that they would be privy to advance information.

Within minutes of the pick being released to
subscribers the stock had already gone above $0.26, but the buyers still came
in. The stock made a new high of $0.39 in intra-day trades.

The next day, Friday, the stock opened well below
$0.26 and as rapid as the rise had been on Thursday, the fall was as quick with
74 percent of its value being wiped out during the day. However, the stock was
up 236% in after-hours on Friday.

The popular notion is that some insiders knew about
the deal to be signed on Thursday and acting on that `promoted' the stock
assiduously among those investors who are looking for bargains.

With regard to the company's agreement with Cell
Runner there were some reports that expressed their suspicions about it.

Hot Stocked said: "The company hasn't announced
any financing, so how they could even manufacture those units is a bit of a
mystery. Back in June VLNX supposedly met with a representative of the
Brazilian government to discuss the production of the aforementioned units,
however there have been no updates on that matter."

It also pointed out that "the number of
outstanding shares according to the reports of VLNX is 375.1 million and the
public float is supposed to be 100 million shares; if that's true it would mean
that the whole float of VLNX was traded several times. A volume of that
proportion can alternatively be explained by dilution, which hasn't been
reported to the public."